Could you outlive your retirement funds? Strategize with a fiduciary


INDIANAPOLIS – People are living longer, and as wonderful as that news is to many, there’s a possible downside: outliving their money in retirement.

“It’s a very large fear many people have,” Alexander Joyce, president and CEO of ReJoyce Financial LLC and author of “ReJoyce In Your Retirement: Everything You Need To Know To Get Everything You Want,” said. “Most retirement plans have not incorporated the longevity risk. And without mitigating that, many middle-class retirees could exhaust their 401ks and be left with only Social Security and a little equity in their homes.”

The financial worries about retirement and the planning options can be overwhelming. One of the concerns people have is getting appropriate advice and finding a financial advisor who puts the client’s interests above their own.

That type of retirement planner is defined as a fiduciary, and according to a survey by Financial Engines, 93% of Americans think financial advisors who provide retirement advice should be fiduciaries – legally required to put their clients’ best interests first.

On the other hand, 53% of those respondents mistakenly believe that all financial advisors are fiduciaries.

“Trust is imperative, especially where a client’s retirement is concerned,” Joyce said. “An advisor working as a fiduciary is held to a high standard of honesty and full disclosure to the client. And there are three critical aspects of retirement planning in which a fiduciary can help guide the client to both protect their retirement assets and prosper.”

Fiduciaries can help reduce sequence-of-return risks, which refers to the order of annual investment returns. It becomes a concern for retirees who are living off the income and capital of their investments.

“The danger comes when an investor receives lower or negative returns due to withdrawals made from their investment,” Joyce said. “The timing of taking those returns impacts wealth. A planner who’s a fiduciary has multiple ways to reduce sequence-of-returns risk by allowing the portfolio to stay ahead of inflation. You utilize other income-producing vehicles in the portfolio.”

They can help prioritize a tax plan.

“Understand that in retirement you’re creating your own income from qualified money – money that’s never been taxed before,” Joyce said. “It’s vital to have a tax plan that can fit into your portfolio. For example, the required minimum distribution at age 70 1/2 is something many people are not prepared for in terms of tax impact. The RMDs have never been such a concern in our economy than they are now, because such a large percentage of baby boomers are over 70 1/2. Having a reallocation plan or a Roth conversion conversation is important to avoid higher tax burdens.”

Fiduciaries can help create an estate plan. Procrastination is an obstacle for many when it comes to estate planning, Joyce said, and it’s important to differentiate between a will, which goes through probate, and a trust.

“Understand how those things fit in the portfolio, and the difference between live-on money and leave-behind money,” he said. “You need to establish goals for the assets. A lot of people want to leave a legacy, but they don’t know how large, or how or when. A fiduciary can help you leverage technology and look at a realistic rate of return, based on your  projected longevity.

“Having all these planning tools under a full-service fiduciary roof is powerful, because the baby boomer generation doesn’t like change. They need a sense of security before reaching retirement; solid options to make their financial fears and uncertainty go away,” he said.

Alexander Joyce is CEO and president of ReJoyce Financial LLC, a full-service retirement income planning firm in Indianapolis. He’s the author of ”ReJoyce In Your Retirement: Everything You Need To Know To Get Everything You Want.” Joyce holds National Social Security Advisor and Charted Retirement Planning Counselor designations. He hosts informational and educational seminars as well as the radio show “Retirement Halftime Show.” He can be seen monthly on “Money Monday” as well as “Your Money” on the “IndyStyle” program, broadcast by WISH-TV, myINDY-TV and WTHR in Indianapolis. For more information, visit